Dow Jones futures rise on dovish Fed outlook, chip stocks outperform

• Dow Jones futures advance amid easing risk aversion, driven by the rising odds of the Fed rate cuts.
• Semiconductor stocks outperformed after Trump clarified that his 100% tariff on imported chips would exempt US companies.
• Fed Governor Christopher Waller is emerging as a leading contender for the role of Fed chair.

Dow Jones futures advance during early European hours, ahead of the market opening in the United States (US) on Friday, trading above 44,100, up by 0.14%. Meanwhile, S&P 500 futures rise by 0.16% to 6,370, and Nasdaq 100 futures appreciate 0.18% to trade around 23,300.

US stock futures receive support from easing risk aversion due to rising odds of the US Federal Reserve (Fed) delivering a rate cut in September, with expecting another possible move in December. Traders are pricing in nearly a 93% possibility of a 25 basis point (bps) cut in September, up from 48% a week ago, according to the CME FedWatch tool.

The US Initial Jobless Claims rose to 226K for the week ending August 2, against the expected increase of 221K and the previous week's 218K rise. The increased jobless claims in the United States (US), along with the weaker July US Nonfarm Payrolls (NFP) data, have boosted the dovish sentiment surrounding the Fed policy outlook.

President Trump has nominated Stephen Miran, chair of the Council of Economic Advisors, to succeed Adriana Kugler on the Federal Reserve Board of Governors. Trump's plans to replace Fed Chair Powell will be observed as Fed Governor Christopher Waller, seen as more dovish, is emerging as a top candidate to serve as the central bank's chair, per Bloomberg.

US markets showed a mixed performance on Thursday's regular market. The Dow Jones depreciated 0.51% and the S&P 500 fell 0.08%, while the Nasdaq Composite advanced 0.35%. Semiconductor shares outperformed as US President Donald Trump clarified that his 100% levy on imported chips would exempt firms manufacturing within the US.

Traders may adopt caution on Friday's regular market as Trump's sweeping retaliatory tariffs took effect on Thursday, with rates ranging from 10% to 41%, fueling concerns about their potential impact on the US economy.